Centre Clears Major Funding Boost for Grid-Scale Energy Storage
Plan targets 92 GWh of new storage capacity by 2031, with support for battery systems, pumped storage and emerging technologies
- Cabinet approves Rs 14,500 crore in VGF support.
- Scheme targets 92 GWh of new storage capacity.
- Battery projects must meet a 40% domestic content requirement.
- Total estimated investment stands at Rs 97,600 crore.
GG News Bureau
New Delhi, 4th Nov: The Union Cabinet has approved the Grid-Scale Energy Storage Scheme, committing Rs 14,500 crore in viability gap funding (VGF) to develop 92 GWh of new energy storage capacity across India between FY 2026–27 and FY 2030–31.
The scheme, chaired by Prime Minister Narendra Modi, aims to accelerate renewable energy integration, improve grid stability and ensure reliable, affordable electricity supply around the clock.
Of the proposed 92 GWh capacity, 60 GWh will come from Hydro Pumped Storage Projects (PSPs), 30 GWh from Battery Energy Storage Systems (BESS) and 2 GWh from emerging storage technologies. The projects are expected to attract a total investment of approximately Rs 97,600 crore.
According to the government, the new capacity will be equivalent to 170% of India’s present grid-scale energy storage capacity. It will also contribute towards meeting the country’s projected requirement of 411 GWh by 2031–32.
The VGF support is intended to improve the financial viability of large-scale storage projects and encourage faster deployment. Capacity will be allocated through a tariff-based competitive bidding process.
Public and private sector electricity distribution companies will be eligible for funding support for battery and pumped storage projects. Projects based on alternative storage technologies will also be open to public and private sector entities.
A key feature of the scheme is its focus on domestic manufacturing. Battery storage projects will have to meet a minimum Domestic Content Requirement (DCR) of 40%, aimed at encouraging indigenous production and reducing dependence on imported components.
The government expects the initiative to help manage fluctuations in renewable energy generation, reduce dependence on conventional power sources for balancing supply and strengthen long-term energy security.
The scheme is also aligned with the broader objectives of Atmanirbhar Bharat and Viksit Bharat, with an emphasis on building a flexible and resilient electricity infrastructure.
